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Compagnie Générale De Géophysique – Veritas Announces The Launch Of A €414 Million Rights Offering

Compagnie Générale de Géophysique - Veritas (Paris: GA) (NYSE:CGV) (CGGVeritas) announced on 24 September 2012 that it had entered into an agreement with the Dutch group Fugro to acquire the businesses of its Geoscience division (excluding multi-clients library and OBN businesses) (the “
Geoscience Division”) for a price of 1.2 billion euros and establish a joint venture specialising in ocean bottom seismic data acquisition (the “
Seabed Joint Venture”). To fund such acquisition, CGGVeritas launches today a capital increase via an offering of preferential subscription rights to existing shareholders for a gross amount of approximately €414 million.
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The net proceeds of the issuance will be used to pay a portion of the acquisition price for the Geoscience Division (the “
Acquisition”). The remainder of the Acquisition price will be (i) paid by way of set-off of €225 million from Fugro representing the excess value of CGGVeritas contribution to the Seabed Joint Venture and (ii) paid with the proceeds of debt financing, in the form of convertible or non-convertible bond issuances and/or bank loans (CGGVeritas benefits from a bridge credit facility commitment of up to €700 million).

The completion of the Acquisition is subject to certain customary conditions precedent for this type of transaction, in particular the approval of competition authorities, and the signing of the agreement establishing the Seabed Joint Venture.

If the Acquisition is not achieved, in particular if the relevant conditions precedent are not satisfied, the net proceeds of the issue will be allocated to the repayment of the Group’s existing debt.

Commenting on this transaction, Mr. Jean-Georges Malcor, Chief Executive Officer, noted: “
The acquisition of Fugro’s Geosciences Division and the establishment of long-term strategic partnerships with Fugro will allow us to occupy a leading position in the Geosciences market while simultaneously reinforcing our core activities. With a more resilient position and an integrated offering of high quality products and services, we will accelerate profitable growth and thereby create shareholder value. I am pleased to have the support of our principal shareholder, the Fonds Stratégique d’Investissement, in cooperation with IFPEN, in connection with this transaction, as it confirmed today its participation in the capital increase”.

Each shareholder of CGGVeritas will receive one preferential subscription right for every share it holds as of the close of trading on 27 September 2012. The subscription price for the new shares has been set at 17 euros per share (nominal value of €0.40 and issue premium of €16.60) on the basis of 4 new shares for 25 existing shares. The subscription price represents a 33.07% discount to the closing price of the Company’s shares on 25 September 2012 and a 29.87% discount to the theoretical ex-right price (TERP).

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